Essar Steel appoints investment bankers to find strategic partners

A statement issued by Essar Steel said that this decision is in addition to previously announced plans to monetise certain non-core assets to raise equity and infuse additional funds for ramping up operations to full capacitySangita Mehta | ET Bureau | November 09, 2015, 15:00 IST

MUMBAI: Essar Steel on Saturday said that it has appointed ICICI Securities and SBI Capital Markets as advisors to identify and induct strategic or financial investors in the company. The decisions comes at a time when lenders are looking at ways to exit from the company.

There are reports that lenders such as ICICI Bank, Axis Bank and Standard Chartered Bank is in talks with Russian bank – VTB Bank to sell a part of their $ 3.5 billion loan exposure. A statement issued by Essar Steel said, “This decision is in addition to previously announced plans to monetise certain non-core assets to raise equity and infuse additional funds for ramping up operations to full capacity.”

In fact two banks – Bank of India and HDFC Bank have declared the account as non-performing loan in the quarter ending June 2015. HDFC Bank has sold its loan to Edelweiss ARC. Banks have cumulative exposure of close to Rs 40000 crore on Essar Steel which includes long term loans, working capital loans and foreign currency loan. Even as lenders have restructured a part of their loans under the 5:25 scheme which gives company a longer time to repay loans, there are concerns about the repayment capability of the company.

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